A belated thank you for your response.
I have another issue to address now. We sold my father-in-law's home in 2020 to an acquaintance who needed a few months to apply for a mortgage. We agreed to a 10% down payment and to accept principal payments for up to twelve months. After 18 months, they defaulted on the agreement and we sold the home again, in 2022. On our 2020 tax return I listed the full sales price of $160k with a basis of $160k, which is the amount the inheritance tax was based on. Do I need to go back and amend returns for 2020 and 2021 to reflect the payments made or can I just add it all together on our 2022 return? It is my understanding that any amount over the basis price of $160k is subject to capital gains.
Thanks
Dave
